The sharp slowdown in new originations has resulted in significant downsizing for many lenders, with reductions occurring across the organization, including servicing as well as loan origination. But as executives look at the forecast for lower volumes of new loans coming in the door, they also need to consider how much servicing volume was added or shifted over the prior three years. For example, in 2020 and 2021, servicers boarded somewhere between 13.5 and 13.6 million loans on a unit basis, according to the Mortgage Bankers Association. Put another way: 43% of all outstanding mortgages were on-boarded in those two years alone, many loans at interest rates in the mid-to-high 2% range which means they will be in portfolios for years.

How can servicers maintain lean headcounts without jeopardizing service levels or missing key deadlines, like fourth quarter tax payments? The starting point might be taking a hard look at how your company is handling key processes like tax and whether it might make sense to outsource all or part of this process.

Some questions to consider…

  1. Has your portfolio grown to the point that managing this process, either with an outside vendor or internally, is becoming a strain?
  2. In the past, has your servicing department been forced to hire temps or redeploy staff to manage the surge of tax payments in the fourth quarter? Will you be able to continue to justify these expenses in the current down cycle?
  3. Were your tax payments late this past tax season? And how much did this cost your company or your tax vendor in penalties?
  4. In the second half of 2022, several large counties pushed back their delivery of tax information. Did this create operational problems for your internal staff?
  5. Several years of record home price appreciation is now resulting in higher tax assessments. Is this creating a surge in calls from borrowers questioning the changes in their escrow accounts?
  6. Are you worried about the reputational risk associated with large scale errors in tax processing?

Our firm provides a full range of tax and flood certification solutions to residential, commercial and specialty servicers. Because we are experts in tax and have a single focus as a company, we are able to invest in technologies that enable lenders to successfully outsource all or part of their tax operations.

Total Tax Solutions®, our flagship platform, provides customers with a transparent view into all the servicing work flows that make up a tax payment and reporting cycle. Outsourced customers benefit from LERETA completing all the work on their behalf with direct visibility into processing. Enhanced Tax customers can use Total Tax Solutions as their own workflow tool, allowing them to manage their taxes on their own, with increased accuracy and flexibility while integrated with their loan servicing system for maximum efficiencies.

LERETA’s call center technology and its experienced staffing have made it a leader in tax service outsourcing. Here are some recent metrics:

  • 80% of issues are resolved within the first call
  • The average call time was 6 minutes
  • The call abandonment rate was less than 1%
  • The average speed of answer was 15 seconds
  • The average length of experience among call center reps was more than 10 years

For more information on how LERETA can help servicers in down cycles contact

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